Data Center Campus Eyed for Magic Valley as Tax Cuts Continue

Legislators fail to curb tax breaks for data centers, paving way for potential new project in Raft River area.

Apr. 6, 2026 at 7:24pm

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A conceptual 3D illustration featuring a glowing, high-tech data center campus with illuminated server racks, cooling towers, and fiber optic cables, representing the infrastructure behind the growing data center industry in Idaho.The potential development of a new data center campus in Idaho's Magic Valley region raises questions about the state's continued tax incentives for the tech industry.Kuna Today

Despite efforts by some state legislators to roll back tax cuts for data centers and impose new restrictions on their water and power usage, the generous tax incentives remain in place in Idaho. This means a California-based data center developer, Terra Volt Infrastructure Inc., is in discussions to build a large data center campus in the Raft River area between Twin Falls and Pocatello, which could qualify for significant tax breaks.

Why it matters

The continued tax breaks for data centers highlight the ongoing debate in Idaho over how much the state should spend to attract these facilities, which bring relatively few permanent jobs but can have a significant impact on local water and power supplies. While some legislators pushed for reforms, the powerful tech lobby was able to block changes that would have narrowed the eligibility for the tax incentives.

The details

Legislation that would have sunset the sales tax exemption for data centers after 20 years, restricted what items they can get sales tax exemptions on, and created new criteria for electricity and power usage failed to pass the state legislature. This means the 620-acre Diode Ventures data center approved in Kuna could still qualify for the state's generous tax relief package. Discussions are also ongoing about a potential data center campus project by Terra Volt Infrastructure Inc. in the Raft River area, between Twin Falls and Pocatello, though no formal application has been filed yet.

  • In 2026, legislators from both parties worked on three different versions of a bill to reform data center tax incentives.
  • The House of Representatives never took up the final amended version of the bill, leaving the tax breaks in place for at least another year.

The players

Chris Bruce

A Republican state representative from Kuna who co-wrote the bills to reform data center tax incentives.

Lori Den Hartog

The Republican state Senate Majority Leader who co-wrote the bills to reform data center tax incentives.

Terra Volt Infrastructure Inc.

A California-based company that develops "master planned data center campuses" and is in discussions to build a project in the Raft River area of Idaho.

Mike Moyle

The Republican Speaker of the Idaho House of Representatives who sponsored a bill requiring data centers to recycle water used for cooling.

Stephanie Mickelsen

A Republican state representative from Idaho Falls who sponsored a bill requiring data centers to cover the full cost of their energy use.

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What they’re saying

“The original tax incentive we have on the books is very broad, very expansive, and this piece of legislation is here to narrow it down.”

— Lori Den Hartog, State Senate Majority Leader

“Last I heard, they weren't looking at being under construction until 2027. They're pretty far from that, though... Every time I turn around, what I hear is a little bit different.”

— Lori Den Hartog, State Senate Majority Leader

What’s next

Legislators have indicated they plan to revisit the issue of reforming the property tax cap for large data center investments in future legislative sessions.

The takeaway

The continued tax breaks for data centers in Idaho highlight the power of the tech industry lobby and the ongoing tension between attracting new investment and mitigating the environmental impacts of data centers on local communities.